NCPA - National Center for Policy Analysis

Medical Tourism Is Growing

April 7, 2011

According to Deloitte consulting services, 875,000 Americans were medical tourists in 2010, traveling outside U.S. borders to receive health care: dental work, elective hip replacements, even bypass surgery, says Manoj Jain, an adjunct assistant professor at the Rollins School of Public Health at Emory University in Atlanta.

  • According to Devi Shetty, the founder of Narayana Hrudayalaya (NH) Hospitals in Bangalore and a pediatric cardiothoracic surgeon, bypass surgeries cost his patients $2,000 to $5,000, a tenth of what it would cost in the United States.
  • His formula is simple: Focus on the process and on volume.
  • Just as Wal-Mart capitalizes on the power of bulk purchasing, Shetty has applied process and volume principles to his hospitals, using innovation and well-tested surgical techniques developed in the United States.

Devon Herrick, a senior fellow at the National Center for Policy Analysis, identifies other factors that make foreign hospitals less expensive: lower labor costs certainly, but also fewer third-party payments, price transparency, limited malpractice liability and fewer regulations.

While fewer than 2 percent of U.S. health care spending can take place abroad (because many conditions require urgent attention), what may be more significant is the potential growth of ordinary medical services, such as radiology and laboratory tests.  

  • Ten to 30 percent of medical transcription is sent overseas, according to the American Transcription Association.
  • And more than 200 hospitals contract for "nighthawk" radiology reading services in India or Australia, taking advantage of the 12-hour time difference, according to a 2006 New England Journal of Medicine article.

Source: Manoj Jain, "Medical Tourism Draws Growing Numbers of Americans to Seek Health Care Abroad," Washington Post, April 4, 2011.

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